Much has been written about Nintendo’s mobile strategy to provide limited development support to mobile devices, but the data itself spells out why Nintendo is being conservative on the mobile.
In a presentation to investors last week, Nintendo President Satoru Iwata announced Nintendo’s plans to release a limited range of applications on mobile devices. Iwata ruled out porting the company’s large game library to mobile, as well as building any applications that could be seen as direct competition or hindrances to Nintendo’s console and handheld businesses. Instead, the company will leverage mobile applications as a method to communicate and market to their consumers.
Mobile Gamers Aren’t Playing Nintendo-Style Games
While mobile games are big business, they’re not Nintendo’s business. The games people are playing just aren’t in the genres Nintendo excels in.
Consumers on mobile devices are not flocking to action, racing or fighting games, among Nintendo’s strongest genres. Instead, a quarter of mobile gamers prefer puzzles games.
Despite the popularity of Nintendo’s games on consoles and handheld games, there is not evidence if strong demand on mobile.
“We feel that simply releasing our games just as they are on smart devices would not provide the best entertainment for smart devices, so we are not going to take any approach of this nature,” said Nintendo President Satoru Iwata.
Mobile Gamers Likely Won’t Pay for Nintendo Games Upfront
The biggest challenge for Nintendo to port games to mobile is that consumers aren’t buying games on mobile devices. In 2013, only 7% of revenue for mobile games came from non-free games. The obvious, but still staggering, size of this story is that free to play monetization tools bring in 93% of all spending on mobile games.
There are currently no titles in Nintendo’s back-catalog of games that are designed from the ground up for free to play. The company has never designed games with a range of free to play monetization methods involved. Without planning from the start when to insert time gates, probability gates, grind gates, or other monetization methods, Nintendo’s games would lag other game makers in a free to play environment.
Research firm SuperData agrees.
“Nintendo’s existing titles are not geared toward a market that is moving toward free-to-play,” noted SuperData last week. “The truth is that Nintendo’s business can’t simply redirect and adopt a free-to-play model.”
Nintendo is Wise to Use Mobile Apps for Marketing & Dialogue
While criticized by some as being too conservative, Nintendo’s decision to release entertaining apps on mobile devices that can promote the sale of the company’s core handheld and console gaming units is a smart choice.
Recent analysis by Gartner indicates that most mobile apps will not generate profits, but instead they will increase brand recognition and product awareness.
“Our analysis shows that most mobile applications are not generating profits and that many mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun,” said Ken Dulaney, vice president of Gartner to Mediapost.
Dulaney warns app developers not to expect profitability; echoing Nintendo’s guidance to investors that mobile can be a communication tool instead of a path to profits.
“Application designers who do not recognize this may find profits elusive,” said Dulaney.
Nintendo is not ready to publicly discuss the goals of their mobile campaigns, but they are testing the waters this year.
“It is our intention to release some application on smart devices this year that is capable of attracting consumer attention and communicating the value of our entertainment offerings, so I would encourage you to see how our approach yields results,” said Nintendo president Satoru Iwata.
Mobile Apps Let Nintendo Talk to Children and Parents Together
“Our biggest downfall last year was that we failed to communicate the true value of Wii U, failed to make children persuade their parents to buy our products for them, and failed to offer products that parents could not resist,” said Shigeru Miyamoto, Nintendo’s lead game designer.
Without a true presence on mobile phones and tablets, Nintendo is losing touch with children increasingly dependent on mobile devices.
Not only are children using mobile devices at rapid rates, they’re also playing games with their parents. Of parents who play mobile games, 23% play with their children at least once a day.
By releasing marketing experiences on mobile devices, Nintendo will have a new communication point with both children and parents to help the company upsell console and handheld device experiences.
Nintendo Will Release Some Existing Products on Mobile
While Nintendo confirmed traditional games like Mario won’t move to mobile other properties and games still may.
Services already released on existing Nintendo hardware that are “capable of improving usability and consumer experience when they are implemented on smart devices” will receive a shift of development efforts to smart devices, said Satoru Iwata. While no titles are confirmed, games from the Wii Fit and Brain Age franchises, which work best when used daily to check-in to their programs, may find better homes mobile than Nintendo’s own platforms.
Nintendo’s Mobile Strategy is a First Step for the Future
Nintendo’s first steps towards mobile indicate a thought-out conservative approach to leverage the platform. This first phase will leverage the vast audience of mobile users to open communication channels to users, and to bring apps to mobile that are missing their full potential by only being on consoles and handhelds. At the very least, Nintendo’s efforts will give brands like Mario, Zelda and Wii Fit an opportunity to collect mobile mindshare, an important first step in making the company relevant again to those who moved onto mobile-only experiences.